Eric's Ice Cream Parlor produces two types of ice cream on a contract basis for a major grocery store using a large blender. A batch of ice cream A, requires process mixing of 2.3 minutes per gallon, a setup time of 50 minutes, and 50 gallons are made per day. Using the same blender, 35 minutes are required in order for it to cleaned and re-setup so that batch B can start. Batch B also requires process mixing time of 198 seconds per gallon, and 50 gallons are produced per day. a) Compute the required capacity (8 points) b) What percentage of total capacity is setup time? (2 points) Efficiency Actual output rate = Actual output rate/Effective capacity Utilization Uptime/Available time Capacity Required (C) = Setup Time (S) + Processing Time (P) x Order Size (Q) Utilization (U) = "Resources used "/"Resources available "I Utilization (U) = "Demand rate "/("Service rate x Number of "@"servers") Flow time (T) -Throughput (R) - Work-in-process (WIP) Work-in-process = Throughput x Flow time Internal Failure Costs - fixing problems during production External Failure Costs - fixing problems after delivery to customer Taguchi Loss Function L(x) = k(x-T)2 Economic Order Quantity (EOQ) = Total Annual cost = Annual Holding Cost + Annual Ordering Cost TC Q/2X H+ D/QX S = 2DS H 2(Annual Demand) (Order or Setup Cost) Reorder Point (ROP) = ROP = d X LT Annual Holding Cost ROP= Expected demand during lead time + Safety stock